Note: This blog post also ran in the Society of Professional Journalism’s “Journalism and the World” blog. Click here to see the original post.
You can’t spit in the street in Shanghai these days without hitting a venture capitalist trying to give out money. The economy is growing so far, and there are so many opportunities, that it’s a tempting target like no other.
However, only a small proportion of businesses actually need VC funding. If you have customers and a good product, you can grow organically — just plow the profits back into the company. You don’t have to give away equity, or take on debt.
Other companies get funding from strategic partners, from family and friends, you name it.
Plus, VCs need to see big ideas — anything small isn’t worth the time it takes to invest in it — and a clear exit plan.
I’m working on launching a magazine now about business and infrastructure in the undiscovered parts of China — the provinces that are all trying to catch up to Shanghai but where no foreign business journalists are posted. Since there’s little local business journalism (at least, as we know it in the west) this is a huge untapped opportunity. I’m going to have to hire an outside publisher to handle the advertising sales (I don’t want to get into a conflict of interest situation with the editorial side of what I’m doing). But I’m not going to need any outside money — though that isn’t stopping people from trying to offer it to me. It’s a nice situation to be in.
On Wednesday, I gave a talk about influence and marketing to the Shanghai Entrepreneur Group (I was its president last year) and, as is often a case, there was a venture capitalist there as well, asking us if we had business plans. And who in Shanghai these doesn’t doesn’t have a business plan in a back pocket ready to whip out at a moment’s notice?
It reminds me of when I was covering the whole dot-com thing. I was at Computerworld, writing about everything happening in the banking and online brokerage sector. It’s hard to be a mere reporter if you have any imagination and energy when all around you people are launching new businesses.
Today, in Shanghai, the situation is the same. Fons Tuinstra is the perfect example of this — he’s a former foreign correspondent, in fact the founder of the Shanghai Foreign Correspondents Club — and author of a book about business in China. But now he’s running China’s first, and only, profesional speaker’s bureau.
One of my financial reporters quit recently to go into business development. And a former freelancer left to start her own business providing musical instruments to schools.
Signing off in Shanghai,